The future of offshore call centres (2012-2017)
Back in 2002, I wrote the first of my articles entitled 'The future of Offshore Call Centre Outsourcing'. At that time, I made a number of predictions which many criticised at the time but have now become reality
- The Philippines would overtake India. This was perhaps the most controversial of the predictions given that India already had a large industry and The Philippines did not.
- That there would be a backlash from Governments, the public and trade unions about offshore call centres. Again, this was true but the impact of this was different in the UK to the USA where there has been a significant Government back-lash against all offshore outsourcing whereas the UK Government has been relatively quiet.
- I also predicted a fight-back from domestic centres in The UK and again this has been true with most UK based outsourcers significantly raising their game.
- I also predicted relatively small volumes of work going to locations such as South Africa and Eastern Europe compared with their Asian counterparts. Eastern Europe tends to focus more on multi-lingual applications (including Engish). South Africa has been bolstered by Government incentives but still the numbers of people employed there is relatively small compared with India and The Philippines.
- I also predicted very rapid growth in the offshore call centre sector. All the responses I had from UK based professionals was that I had over-estimated this growth. In reality, even my ambitious projections were below what was achieved.
Well, it's now time to make my predictions for the next 5 years and I see some interesting developments taking place.
- I do not envisage the percentage of work done offshore as opposed to domestically in the UK changing in the way it has over the previous 10 years. The cost differentials between the UK and offshore have reduced and the weak vendors in the UK have either gone bankrupt or have been taken over. The domestic UK marketplace is therefore stronger than it was in 2002.
- Offshore vendors will increasingly differentiate themselves based on service offerings and industries served. This will mirror trends seen in The United States but the offshore vendors who will thrive need to be able to demonstrate specific skills and knowledge and not just cost arbitrage.
- Certain industries will increasingly push work overseas. These include retail and travel. Other industries will not increase numbers offshore significantly.
- Clients of outsourced vendors now have a clearer picture of what works offshore and what does not. This will increasingly translate into the types of work they push offshore.
- Non-voice BPO will increasingly be performed offshore and its great will be significantly higher than the low growth experienced in the total voice sector.
- Offshore home based agents will not rise significantly. Many companies view offshore as a riskier option already and any additional variables which further complicate this will not be tolerated. This is in contrast to the domestic home-based agents which will increase significantly.
- The growth predictions estimated for The Philippines are heavily over-estimated. The industry in The Philippines can't sustain the rapid growth it has seen but it will still rise.
- There will be increased activity in the offshore sector in non-voice contact centre activity including email support, webchat& social media communications. The growth in these sectors will grow and offshore vendors will be the main beneficiary of this work.
- Weak growth in the UK economy is expected to continue for some time which will increase the availability of high-quality staff domestically until at least 2015. The lack of availability quality staff in The UK in the period 2000-2008 was a major factor in the growth of offshore.
- Low-end outbound activity will continue to be a strong area of growth for offshore
- The number of offshore vendors acquiring UK based outsourced vendors will slow. Many of those who have done this and have generally not experienced the benefits they believed they would. Most believed that by acquiring a domestic vendor, they would be able to move increasing amounts of that client base offshore where they can realise higher margins. This has not been the case.
Overall, I envisage a very mixed picture for offshore call centres over the next 5 years. Some industries will grow offshore and some will reduce. There really is no longer a place for weak offshore vendors. The days when anyone could set up and grow a successful offshore call centre in Manila or Bangalore have gone. Clients are far more savvy and there is therefore a need to differentiate service offerings in what has become an over-crowded marketplace. This article was written by Rob O'Malley, a call centre outsourcing expert. If you would like to discuss this article, please email firstname.lastname@example.org or call Rob on 0121 364 4000